Bottom Line: The Florida marijuana market is 2/3rds the size of Canada’s, growing at ~300% and offers investors huge upside — if you just know where to look. We went digging into state-level data to help you understand the demand trends in the Florida market and identify who the best-positioned companies are.
Bottom Line: Drake is taking a risk partnering with the one large LP without a track record of growing high-quality cannabis. He chose money and scale over quality, the question is if this will end up hurting his brand or if Canopy can up its growing game. Canopy wins by signing one of the biggest celebrities in the world to endorse its products.
Bottom Line: Linton will work with Vireo’s current Chief Executive Officer Kyle Kingsley to oversee the company’s M&A, capital raising, and overall strategic direction.
Bottom Line: This article explores one company’s strategy to grow sales of cannabis-infused beer. Will small batch cannabis breweries own the market or will consumers gravitate to low-cost mass market options. The outcome will be a fascinating case study for business school.
Bottom Line: This article reveals that in Uruguay each producer is capped at 2,000 kg of sales a year and also has their selling price capped at only C$1.22. Not quite the attractive market investors were likely sold by Aurora and others.
Bottom Line: A well-researched article on how the cannabis industry can cut costs and improve efficiency. The article also explores the importance of being first and understanding who your customers are and what they want to buy. Read more»
Bottom Line: Portugal has much lower growing costs than Canada and enjoys less red tape to export to the rest of Europe seeing as it is already part of the trade bloc. In our opinion, investors should be prepared for Canadian imports to be replaced by domestic European supply within the next five years.
Bottom Line: The probability legalization passes doesn’t look like it has gone down, this is simply a delay.
The cannabis sector had a rare green week rising by 1.3%. The U.S. MSOs underperformed Canadian names for the first time in multiple weeks, falling 0.3% compared to the LPs up 1.5%.
We’ve been watching the performance of the U.S. and Canadian stocks closely and U.S. stocks are definitely beginning to outperform their Canadian peers. Since the end of September, U.S. stocks are down 6.1% while the Canadian LPs are down 16%. Investors should begin building a long-term position in a basket of the top five U.S. operators, but save some extra cash to buy on any weakness in 2020.
An upcoming catalyst to watch is a UN meeting in March 2020 to potentially deschedule cannabis as a schedule 1 drug. If this goes through with America’s blessing it could set the wheels in motion for federal legalization sooner than later. The recent vaping crisis will also turn out to be positive for the legal industry as it will scare consumers away from black market vaping products.
The overall marijuana index outperformed the S&P by 0.5% but underperformed the TSX by 0.4% this week and has underperformed by 48.5% and 43.4% YTD.
There are now question marks whether increased sales from cannabis 2.0 products will lift the stocks. Capital markets are largely shut to cannabis companies right now, which is a problem when the business models are built on rapid expansion and big deficits.
Price compression has arrived and will drive cannabis stocks lower over the next 6-12 months in our view without a new regulatory catalyst. Canada cannabis investors should not be putting more money into the sector until retail prices find a bottom.
U.S. stocks will continue to outperform Canadian LPs from here in our view with more catalysts potentially on the horizon. At the first whiff of nationwide U.S. legalization, investors should pile into the largest MSOs and hold for the long term.
- KushCo Reports Record Revenue, Higher Losses for Fiscal 2019
- Former NBA Commissioner Urges League to Reconsider Marijuana Ban
- Vireo Health Taps Bruce Linton for Executive Chairman Position
- The Top Five Ways to Invest in the Florida Marijuana Market
- Legal Cannabis Industry Insists it is Not to Blame for Vaping Illness
- South Dakota Marijuana Legalization Petitions Filed
- Federal Grand Jury Investigates Massachusetts Marijuana Contracts
- Harvest Merger Shows Us That Not All Cannabis Deals Are Created Equal
- Terrascend Withdraws 2019 Guidance, Announces Leadership Changes
- Canopy Growth Wins, Drake Loses in New Cannabis Collaboration
- Ontario Permits Cannabis Producers to Launch Farm Gate Stores
- Quebec Accused of Driving Youth Towards Organized Crime